Investigating the role of national culture on integrated report assurance: international evidence

Abstract

PurposeDrawing on neo-institutional, stakeholder, social contract and contingency theories, the objective of this study is to examine whether cultural values across countries may influence decisions to assure integrated reports.Design/methodology/approachFor this purpose, the authors have collected integrated reporting assurance, national culture and firm-specific data from several sources for the years ranging between 2011 and 2016 and have performed pooled and panel logistic regression analyses.FindingsThe authors found that corporations established in countries where the following characteristics prevail have higher tendencies to assure integrated reports: high collectivism among people, low power distance, strong feminine values rather than masculine values, high uncertainty avoidance, pursuance of short-term goals rather than long-term and a low level of indulgence.Research limitations/implicationsThe study is not free from limitations. First, the authors were only able to obtain assurance data for the years between 2011 and 2016 since 2011 was the initial year in which integrated reporting was adopted. Second, culture variables used throughout the study remained the same for each year due to the unavailability of differing data. This was noted in prior studies as well; thus, this is not an exception. Third, the assumption that all companies in a country have the same culture score is inherent in the scoring system of countries (Orij, 2010).Practical implicationsBased on the results, the authors drew implications for organizations, policymakers and assurance service providers. Multinational corporations can benefit from the outcome of this study by considering national cultures in formulating their corporate strategies. Finally, assurance service providers can position themselves in the marketplace by the findings of this study.Originality/valueThis paper aims to enhance the comprehension of corporate reporting practices by companies that operate in different countries, with necessarily varying cultural values. To the best knowledge of the authors, no prior study has yet examined the impact of national culture on the assurance of integrated reports.

Voluntary sustainability assurance in small and medium‐sized entities: The role of country origin in Europe

“…Our results confirm that SMEs in countries with the following characteristics present a stronger tendency to assure sustainability information: lower power distance, stronger feminine versus masculine values and lower uncertainty avoidance. In general, these findings are in line with the previous literature (Gallén & Peraita, 2018;Romero & Fernandez-Feijoo, 2013;Uyar et al, 2021); however, uncertainty avoidance was found to be positive by Uyar et al (2021), while, here, individualism and long-term orientation have been found…”

“…A number of different sociological variables have been the specific focus of study in this field of research (Martínez‐Ferrero & García‐Sánchez, 2017; Romero & Fernandez‐Feijoo, 2013; Uyar et al, 2021). Hofstede (1980) has characterised national culture in terms of four dimensions that have subsequently been widely employed in academic research: namely, (1) power distance, (2) individualism, (3) masculinity and (4) uncertainty avoidance.…”

Non-financial information assurance: a review of the literature and directions for future research

“…The use of a combination of theories was also noted. For example, Uyar et al (2021) draw on institutional, stakeholder, social contract and contingency theories to explain their results, while Briem and Wald (2018) use institutional, diffusion of innovation and agency theories to analyse their findings.…”

“…In terms of IRA, Kılıç et al (2020), in their multi-country study, documented that ethical business environments, less effective boards and weaker auditing and reporting standards Non-financial information assurance are positively correlated with decisions to secure IRA. Uyar et al (2021) also conducted a multi-country analysis and find that a collectivist culture, lower power distance and high uncertainty avoidance are positively associated with decisions to accept IRA. In comparison, masculine values, long-term orientation and a higher level of indulgence are negatively associated with decisions to accept IRA.…”

Does religiosity lead to sustainability reporting assurance? Evidence from European companies

“…The authors explain that when investors seek information to plan their investment choices, they consider SRA adoption as an observable signal of business ethics, increasing their willingness to invest in the company. The study of Uyar et al (2021) focuses on Hofstede’s cultural dimensions. Their findings prove that companies based in collectivist societies are more likely to adopt SRA practices since they are more concerned about the impact of corporate activities on society when compared to companies from individualistic societies.…”